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Assume an FI Sells A$100 Million for US Dollars on the Spot

question 44

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Assume an FI sells A$100 million for US dollars on the spot currency markets at an exchange rate of A$1.10 to US $1.00 and invests the US dollar assets at an interest rate of 12% for one year.What are the Australian dollar proceeds from the US dollar investment (round to two decimals) ?


Definitions:

Statistically Significant

A measure indicating that the likelihood of a particular result occurring by chance is low, and thus, the result can be considered to have genuine association.

Correlational Study

A research method that examines the relationship between variables, without implying a cause-and-effect relationship.

Experiment

A scientific procedure undertaken to test a hypothesis by systematically manipulating variables.

Experimental Study

A study involving manipulation of variables to determine cause and effect relationships.

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